Union Bank of India Cuts Interest Rates on Home, Vehicle and Personal Loans
Home loans start at 7.15% p.a.; personal loans see sharp 160 bps reduction to 8.75% p.a.
Union Bank of India has announced a reduction in interest rates on select retail loan products, effective December 18, 2025, becoming one of the first public sector banks to respond to the recent monetary easing cycle. The revised rates apply to Home Loans, Vehicle Loans and Personal Loans, aimed at improving affordability for retail borrowers.
Under the new structure, home loan interest rates have been reduced by 30 basis points to start at 7.15% per annum, compared to the earlier 7.45% p.a. Vehicle loan rates have been cut by 40 basis points and will now begin at 7.50% p.a., down from 7.90% p.a. Personal loans have witnessed a significant reduction of 160 basis points, with rates now starting at 8.75% p.a., as against the earlier 10.35% p.a.
In addition to the base rate cuts, the bank is offering an extra concession of 0.10% per annum on eligible Green Finance Home Loans and Vehicle Loans, reinforcing its focus on sustainable financing.
The rate revision follows easing monetary conditions during the year. The Reserve Bank of India reduced the repo rate by 25 basis points to 5.25% on December 5, 2025, marking the fourth rate cut in 2025 and taking the cumulative reduction for the year to 125 basis points. The Union Government has also eased GST norms for the automotive sector.
With these reductions, Union Bank of India aims to support homebuyers, vehicle purchasers and personal loan customers by lowering borrowing costs, while continuing to adhere to prudent lending practices. The revised rates are applicable from December 18, 2025, and remain subject to customer eligibility, credit profile and other applicable terms and conditions.
